Truly Local Advice

Category: Featured

Are you ready to make the leap from renter to homeowner? You’ve saved your nickels. You’ve been watching the housing market and found a neighbourhood you like. You’ve gotten tired of lugging groceries up 6 flights of stairs every time your elevator is out. Buying your first home is an exciting time. It is also a huge decision. Here are the things you should think about before you buy.

Mortgage Pre-Approvals Are Not a Guarantee

As a first step toward buying your first home, it is a good idea to get pre-approved for a mortgage – it’ll help you know how much you can afford to spend. But remember! A pre-approval is a preliminary estimate of the loan you could get from a lender. It is not a guarantee that a lender will give you that exact amount. Once you find your home and send your offer to your lender, he or she will go over the details and come up a final number. Your lender may also find variables (think: excessive debt they didn’t know you held, problems with the property or title you want to purchase, etc.) that lead to you getting less than you’d anticipated or not getting a mortgage at all!

Home Budgeting Will Save You

While a mortgage pre-approval will tell you the maximum you CAN spend, it doesn’t mean you SHOULD spend that much. If you go to your max, will you be able to afford other expenses as they come up in your life? Like replacing that ’07 clunker you’ve been cruising around in for too long. What if mortgage rates go up, will you be able to afford your new payments? It is crucial to budget for the purchase and maintenance of your home and lifestyle expenses. Review your financial situation –including your income, expenses, debt, savings, and investments — and be realistic about your budget. Figure out how much you can afford to spend on a mortgage without causing yourself to be house rich and cash poor. You don’t want to live in that dream home without furniture or food.

The Mortgage Stress Test Has Changed

Canada’s banking regulator (OSFI) recently introduced new rules for financial institutions issuing mortgages. As of January 2018, if you apply for a new mortgage (or renew your mortgage with a new lender), they will apply a new mortgage stress test. To vet applicants, your lender will use a minimum qualifying rate equal to the Bank of Canada’s five-year mortgage rate or their contractual rate plus 2 percent, whichever is greater. With this test, you may not qualify for the larger mortgage you want. If you read the home budgeting warning above, you’ll know that might be a good thing.

The Home Buyers Plan Can Help

Sure they took away your big mortgage with the mortgage stress test, but the Canadian government throws you a lifeline with the Home Buyers Plan. With this plan, you may be able to make a tax-free withdrawal (up to $25,000 per person) from your RRSPs to purchase your first home. This will come in handy if you need a larger down payment because you don’t qualify for (or can’t afford) as much of a mortgage. Yes. You have to pay it back. Of course, there are rules associated with the Home Buyers Plan, but speak to your lender to see if it is a viable option to help you get into your first home.

Welcome to your 30s! You’ll be spending less money on fun and more money on necessities. You’ll be spending less time with friends and more time at work. Your 30s are a time defined by one thing: change.

It’s everyone’s favourite time of the year: tax time! Get ready for the banners and balloons and celebrations… or hide your paperwork in the closet and hope the receipts magically sort themselves out. That sounds more realistic! You may want to hide from your finances, but you can gain a lot by dedicating adequate time and resources to bookkeeping and accounting. This is particularly true for business owners.

Financial institutions are not all created equal and neither are their members. As a member of the team at PenFinancial Credit Union, I get to see how unique our members and their needs are and how we can help them everyday. That may sound a little trite, but it is true. I originally wanted to open my first Truly Local Advice blog with a fun quote about banking. After googling “banking quotes”, I learned that my industry isn’t very popular… at all. So I shelved that idea and went with sincerity over humour for my opening. Beyond that, I felt compelled to do some charity work after reading how cunning and unscrupulous my industry can be.

How do you feel about holiday shopping? I know I’d rather clean toilets. That’s why I bill myself as a shopping ninja: I’ll plan a shopping excursion for the item I need, power walk with purpose into that store, snap up the coveted item, and triumphantly exit that store faster than the clerks can ask if I’d like to pay for the extended warranty. It’s no wonder I’ve always loved convenience stores. They’re a convenient way to grab those random items… or in my case, they’re a convenient way to grab those holiday gifts I put off and forget to buy. Yup. That happened.

Investing is a variable experience. It varies according to your goals, your profile, and a host of other factors. As a woman in your 40s or 50s, those factors may include experiences unique to your demographic. Think about all the women you know who have children to put through college; or have lost a job or had a spouse who lost a job; or who have lost a spouse – most often on purpose! For many women, these common experiences add a layer of uncertainty in their financial world, and for some, cause them to wonder if they’ll ever be able to retire. But, I am here to reassure you that you can find a way to retire, and enjoy your life in the meantime too.

Millennials. Gen-X & Y’ers. Baby boomers. Canada is a mosaic filled with diverse cultures and multiple generations of wisdom. I was reminded of this recently when a member met with me to plan for her joint finances with her common-law husband. Did you automatically picture a young person sitting across from me? Bright-eyed and rosy cheeked and damned if she was going to make the same mistakes as her mother? You’d be wrong. Debbie was a 56-year-old divorced woman who had “shacked up” with her new partner, Ron, a year earlier. It seems that millennials aren’t the only ones skipping the walk down the aisle these days.Read More

The idea of a wedding on a budget may make you recoil in horror – this is supposed to be your dream day, an amazing event to celebrate your life together, not a dreary affair with sawdust chicken and moonshine wine.Read More

You’ve secured funding and have approximately enough money to cover your year at school.

Check.

You know how to make sure your cash lasts all year.

Um….

How will you avoid sliding into your final exams drinking instant coffee and wearing clothes stained with noodle soup? You need a plan. You definitely don’t want to do that. Have you tasted instant coffee lately?Read More

Fraud is no joke. You’ve no doubt seen news stories about money transfer scams: emails promising you $7 million dollars if you transfer money from Nigeria.

Have you ever wondered how people fall for fraud scams? Well, it’s a lot easier than you may think, and it can have you using a few other choice F words if it happens to you. In our busy, automated world, it is easy to accidentally click on a pop-up ad, open a random spam or phishing message, or download an infected file. You may think you’re replying to an online shopping order confirmation, but with a simple click, you may download malware that accesses your personal data or unwittingly share information with a scammer.

Financial fraud was the topic of a recent Greater Niagara Chamber of Commerce Lunch n’ Learn I spoke at and hearing those F words probably turned a few stomachs. At this event myself, and Detective Sergeant Paul Spiridi of the NRP Central Fraud Unit, helped educate businesses and consumers about a few types of fraud to watch out for and what to do if the F bomb happens to you.

phishing (tricking you into handing over personal and banking details),

spam emails (sent with the hope that you click on a link that will install malware/ransomware to gain access to your device), and

online auction and internet shopping scams (may lead to purchasing items that are never delivered or the recording of personal data, etc.)

Mobile phone scams (someone gains access to your personal data and open a mobile phone account in your name which results in large phone bills, stolen phones to gain access to your personal information or your contact information, text scams that try to make you click on a link to install malware on your system, etc.)

Typically, internet and mobile scams use high tech tools that look and sound real to get you to share your financial information or your money.

According to Detective Sergeant Spiridi, Niagara residents fall victim to all of these types of fraud. In addition, debit and credit card fraud continue to be big problems, as well as elder abuse-related fraud and various forms of identity theft and fraud. He notes that phishing scams can also be particularly problematic. Keep your eyes peeled for our upcoming identity theft blog which will go into this in greater detail.

For example, several Niagara residents have fallen victim to a recent phishing scam that tricks people into believing they owe the Canada Revenue Agency thousands of dollars. The scammers pretend to be a company that works with tax payers to pay outstanding bills to keep victims from being arrested. Victims are told to purchase iTunes gift cards for the amount of the outstanding bill and to give the gift card numbers to the scammers, who will transfer the funds to the CRA.

It may sound like a rather obvious scam, but Detective Sergeant Spiridi notes that high-pressure tactics and personal circumstances lead many people to fall for it. Sometimes victims are tipped off by cashiers when they try to purchase the gift cards. Other times they lose their money to the scammers.

Stay Safe

Ultimately, it is your responsibility to protect yourself from financial fraud in daily life. Although your financial institution may safeguard the transmission of data and its backend, it cannot protect your devices. In addition, as Detective Sergeant Spiridi notes, given the nature of online scams, it is very difficult to track down perpetrators. Your credit card from Welland may be used to make purchases in Tennessee, but it may have been accessed during a security breach by a company you shared your credit card information with 2 years ago. With such international implications, it is impossible for Niagara police to track down who made purchases in your name and thus often impossible to get your money back.

So what can you do to stay safe? To protect yourself Detective Sergeant Spiridi and myself recommend a few tips:

Use caution online. Check for “https” or the lock logo in the address bar before entering your personal information. Avoid downloading from less-than-reputable sites. Go directly to websites instead of clicking on email or mobile links. Scammers can copy brand logos and create very realistic messages and fake sites to trick you into sharing your personal information.

Check your financial statements every month. Ensure no unauthorized transactions have occurred and report them immediately if they have.

Review your credit report annually. Look for unauthorized companies checking your credit, purchases that you did not make, and things like credit cards, lines of credit, etc. that you did not apply for. Often people are unaware of identity theft until they hear from a collections agency – so don’t wait – proactively check your credit. Equifax and TransUnion are two trusted sources.

What do you do if you are the victim of fraud? Depending on the type of fraud, you may report it differently. If you have lost money, Detective Sergeant Spiridi acknowledges that your options may be limited. Here are few things you can do:

If an unauthorized transaction happens in your account, report it to your financial institution immediately for investigation and resolution (the sooner you report the problem, the better chance you have of stopping transactions and saving your money)

Report fraud immediately to other appropriate authorities when you lose money and recognize you might not get it back

The F bomb can have a huge effect on your life. Educate yourself about how to stay safe and take steps to protect yourself. Also, remember that if something seems too good to be true, it probably is. Getting rich quick may seem like a possibility, but it is usually only the scammers that get rich off your misfortune.